The idea that we are now living in a Knowledge-Based Economy has recently shot to prominence within and across the social sciences, political rhetoric and public debates. Indeed, the Knowledge-Based Economy is the latest conceptual embodiment of the belief that information and knowledge are the new and true determinants of value in a changed context of economic activity. This belief has periodically resurfaced across the social sciences since at least the 1960s, in a rapid (and chaotic) sequence and proliferation of concepts, whilst sharing obvious affinities with one another (and the concept of Knowledge-Based Economy itself): at first with the portrayal of society as post-industrial, then with that of the economy as informational, learning, weightless, or simply “new” (often together with, or as alternative to, similar portrayals of society) (Huws, 2003; Kenway et al., 2006; Carlaw et al., 2006). At a material level, the elaboration of these concepts has received a great impulse from the reorganisation and restructuring undergone by productive processes and economic activity in capitalist economies since the 1970s, which have left observers both fascinated and baffled (if not in awe), and which have become themselves an object of conceptualisation and scholarship under, for example, the heading of post-Fordism (see Amin, 1994 for an introduction to the debate). Further, the rise of the concept of Knowledge-Based Economy within and across the social sciences at large is indicative of broader dynamics and trends affecting the latter, albeit in ambiguous ways. Indeed, at a general level, interest in the Knowledge-Based Economy is inscribed in a movement of retreat from the excesses of both neoliberalism and postmodernism which has marked recent developments within and across the social sciences. This has been matched and paralleled by a renewal of analytical curiosity for the imbrication and dynamic interaction of the economic, the material, the social, the political, the ideal and the cultural. The concept of Knowledge-Based Economy is but one expression of such tendencies and revived analytical aims and prospects, and other examples are readily available in the scholarship and debates on social capital (Fine, 2001, 2010b), globalisation and, more recently, financialisation. At a less general level, though, the conceptualisation of the Knowledge-Based Economy exemplifies how such retreat has been uneven across disciplines and topics or, put otherwise, it exemplifies how persisting, though changing and redefined, the influence of both neoliberalism and postmodernism can still be.

The specific case of the Knowledge-Based Economy is a key illustration of this. Indeed (as the first chapter of this thesis will also demonstrate), the limited engagement of mainstream economics with the Knowledge-Based Economy has been deeply marked by the rise of neoliberal elements within and without the discipline, as well as the support that this has offered to specific developments internal to the discipline itself. As a matter of fact, the most prestigious understanding and treatment of the relation between knowledge and the economy provided from within economics was integral to Hayek’s rhetoric in service of the neoliberal programme (Hayek, 1945). Although this was not the only available conceptualisation of the relations between knowledge and the economy within economics (see, for an equally prestigious alternative conceptualisation, Boulding, 1966), it is Hayek’s account that prevailed and proved the most influential in the long run (Mirowski, 2011). Similarly (as the second chapter will also demonstrate), interest in the Knowledge-Based Economy within radicalism and critical scholarship is part and parcel of postmodernist re-elaborations (if not rejection) of Marxism. This is unsurprising for, in many ways, the rise of postmodernism and its prominence within and across the social sciences are tightly and deeply connected with the concept of Knowledge-Based Economy itself: on the one hand, postmodernism has been largely inspired by many of the same ideas and phenomena prompting the development of the concept in the first place (see, for a telling example, the founding text of postmodernism, Lyotard, 1979b), while, on the other hand, postmodernism has also provided the latter with a legitimising force and rhetoric (Huws, 2003), as well as a vast scholarship and a philosophical framework to draw on, engage with, and contribute to. Moving from the domain of scholarship to that of policy, the Knowledge-Based Economy concept has quickly become part of the rhetoric (though not necessarily the policy in practice) of several international institutions (OECD, 1996, 2000;

UNESCO, 2003, 2005; World Bank, 1999; Kaul et al., 1999), and was even cast as a stated policy objective (if not new foundational narrative) for the Eurozone (CEU, 2000). Although this has been somewhat disrupted by the outbreak of the current financial and economic crisis, it is significant that the rhetoric of international institutions (albeit with different qualifications according to institutional purposes, functions and politics) found an important point of convergence with the grievances of those attempting to defend the open and public character of knowledge from privatisation. Indeed, both rhetoric(s) and grievances (although to different extents, for different reasons and with different motives) accept and borrow the characterisation of knowledge as a public good from economic theory. Such characterisation originates in the understanding of scientific activity, research and development as non-rival and non-excludable goods put forward by Arrow (1962a) and Nelson (1959). However, potentially because of its political and moral attraction and its ability to be easily understood, this characterisation of knowledge has become prominent across scholarship, advocacy and even radicalism, as manifest in the rise of the related concept of global public goods (Kaul et al., 1999) and its echoes in, and affinities with, the scholarly (Hess, Ostrom, 2007a) and radical (Hardt, Negri, 2009; Mattei, 2011) debates on the commons. Given this context, it is unsurprising that a critical (radical) scholarship would eventually come to develop, under the heading of cognitive capitalism, with the precise aim of tracing the contours of change and continuity in contemporary capitalism, and of demystifying the idyllic scenarios often associated with the Knowledge-Based Economy (Vercellone, 2003, 2006a, 2007a).

However, all of this raises the issue of the empirical foundations for the concept of KnowledgeBased Economy and of their appropriate conceptualisation. Indeed, to claim that we are now living in a new epoch in the material organisation of economic activity, if not of (or beyond) capitalism altogether, immediately raises the necessity to identify with precision extant changes in the economy and their extent, their origins and sources, and their dynamic interaction with the socio-economic structures and processes shaping the economy and its functioning as a whole. Commentary on the Knowledge-Based Economy, both mainstream and critical, has converged on the identification of a set of stylised facts. These range from the increased importance of intangibles and immaterial goods within conventional Gross Domestic Product figures, through the growth of knowledge-related investment, knowledge work and knowledge-intensive activities, to the ongoing revolution in information communication technologies and the current quantitative and qualitative extension and expansion of patents and intellectual property rights (David, Foray, 2002, 2003; Gorz, 2003; Vercellone, 2003, 2006a; Rullani, 2004; Foray, 2006; Fumagalli, 2007; Pagano, Rossi, 2009). Nonetheless, any understanding of the Knowledge-Based Economy will inevitably hinge on prior understandings and conceptualisations of knowledge, the economy, and the relation between these.

Therefore, there can be (at least potentially) as many understandings of the Knowledge-Based Economy as there are understandings of these elements and their combinations. Significantly, for mainstream economics the nature and role of knowledge has occupied a shadowy existence, and this reflects an inability to address the issues and content involved at all let alone satisfactorily. This is not to deny that mainstream economists have engaged over specific topics which may be understood as falling within the broad category of phenomena encompassed by the concept of Knowledge-Based Economy (i.e. topics related to one or another stylised fact). Nor is it meant to deny that (casual, mindless and superficial) reference to the relation between knowledge and the economy and to the Knowledge-Based Economy itself is increasingly being made, more or less gingerly, from within mainstream economics (although this is done in contradictory ways, as also demonstrated in the first chapter) (Mirowski, 2011). Rather, what needs to be emphasised is how there has been very little engagement of economics with the concept of Knowledge-Based Economy, its foundations and the scholarship attached to it. Potentially (as suggested in Foley, 2013), this can be explained by an ingrained and firm belief, within mainstream economics, in the logic of “Engel curves”, whereby the shift from the satisfaction of (strictly and narrowly conceived) material needs to that of immaterial needs, and the consequent shift in the preponderance of economic activity addressing and catering for the latter as opposed to the former (together with the phenomenon of deindustrialisation), is a normal, understandable and predictable consequence of raising standards of living. Yet, while in other areas the assumptions and weaknesses of mainstream economics have not prevented it from addressing the issues involved (as in the cases of social capital and globalisation, for example), in the case of the Knowledge-Based Economy mainstream economics is left behind, and it is only a handful of economists that have attempted to provide the concept with foundations within economics. This lack of engagement follows directly from the flawed understanding of knowledge, the economy, and the relation between the two characterising mainstream economics. Nonetheless, as will be demonstrated in the first chapter, even the limited engagement that there has been with the KnowledgeBased Economy concept and its implications is marked by the weaknesses of the discipline and the idiosyncrasies of those who engage by deploying, or even departing from, the standard categories of mainstream economics.

The relative absence of mainstream economics on the topic of the Knowledge-Based Economy has left a vacuum to be filled, and this offers both an opportunity and a challenge for heterodoxy. Indeed, given the undeniable (though not uncontested) monopoly currently held by orthodox economics over teaching, scholarship, policy advice and policy-making, one of the main thrusts of heterodox economics has been to take the mainstream as point of departure.

While, as mentioned above, there has been, at least in part, convergence between orthodox and heterodox accounts of the Knowledge-Based Economy over the identification of a set of stylised facts, this convergence has been (mis)interpreted (from outside of economics) as a slow, partial and timid coming to their senses of mainstream economists (Rullani, 2004), or (from the point of view of heterodox economists contributing to the cognitive capitalism literature) as confirmation, however partial and uncritical, of the empirical salience of the trends and dynamics identified by the adherents to the cognitive capitalism approach (Fumagalli, 2007). However, if at a theoretical level, the relative lack of scholarship on the Knowledge-Based Economy from within economics opens a world of possibilities for heterodox economics and, more generally, anyone having anything purposeful to say about knowledge, the economy, and the relation between them, all of this has also left enormous scope for ideas to float free in all sorts of directions. Indeed, and precisely because of the popularity of the concept of Knowledge-Based Economy and the corresponding and growing feeling that it needs to be demystified, takes on the latter have multiplied more or less chaotically within and across the social sciences. Further, this has interacted with, and has been exacerbated by, the dynamics and processes leading conceptual innovation within the social sciences to turn, more often than not, into the coining of buzzwords, the bastardisation (naive, opportunistic or otherwise) of the notion of interdisciplinarity, and the powerful support offered to these by the dynamics and processes summarised under the “publish or perish” dictum. As a result, these tendencies have created a problem of focus for this thesis. Thus, priority has been accorded to the literatures and scholarship attempting to provide an understanding of the Knowledge-Based Economy and its dynamics from a theoretical point of view. Therefore, and to begin with, it has seemed appropriate to analyse, in the first chapter, whatever little attention the Knowledge-Based Economy has garnered from within mainstream economics.

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